Ofgem – the energy regulator for Great Britain
Ofgem works with UK energy suppliers to ensure the industry is regulated to the highest standard.
What is Ofgem?
Ofgem is the regulator for the energy industry. They review the wholesale costs in the market and set the maximum amount energy providers like us can charge customers on standard variable tariffs.
Because of the uncertainty in the energy market at the moment, this review now happens every three months.
How do Ofgem decide what the prices will be?
Ofgem set the price cap by working out how much it costs energy suppliers to supply you with gas and electricity. These costs cover things like buying wholesale energy, maintaining supply pipes as well as wiring and operating costs.
Are all tariffs affected?
No. Your tariff will only be capped if you’re on a standard variable or default tariff. These are the British Gas tariffs affected.
- Safeguard Credit
- Safeguard PAYG v2
- Safeguard PAYG
- Standard Variable
- Standard Variable HM
If you’re on a fixed-price tariff, your energy prices won’t change until your tariff contract period ends. Then you can choose a new fixed tariff to ensure you’re protected against future price rises. Or you can do nothing and you’ll automatically be moved onto our Standard Variable Tariff, which changes in line with Ofgem's price reviews.
Why have standing charges gone up, too?
Firstly, what is a standing charge?
A standing charge is a fixed daily amount that we add to your energy bill. Like line rental for a phone. Ofgem recommended that every energy tariff should include a standing charge. That way, all energy suppliers follow the same price structure. So it's easier to compare tariffs and find what’s best for you.
On your energy bill, we’ll ask you to pay a standing charge, as well as the cost of the energy you use. Even if you don’t use any energy, you still pay the standing charge because it’s a fixed amount that covers industry costs (see below). Unfortunately, you can’t reduce this part of your bill by using less energy.
Why has my standing charge increased?
We understand that customers may ask why their standing charges have risen. Ofgem raising its price cap means an increase to both your standing charge and your unit rates. If you’re on a variable tariff, you won’t be charged more than the price cap for your standing charge and unit rates combined. All energy suppliers are monitored by Ofgem to make sure they comply with this.
Standing charges cover:
- Keeping your house connected to the UK energy network
- Using the pipes and wires across the country that carry the energy needed to power your home
- Commitments to reducing CO2 emissions to combat climate change
- Government initiatives to help people unable to afford energy (like the Warm Home Discount)
About the price cap. More detail on the new price cap
The energy market is changing all the time and wholesale energy prices are very high which affects the prices we are able to charge. Read more about the causes of wholesale energy price increases